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Wow. Completely unfair for those of us who don't go out and buy new cars, swanky condos, or plasma TV's and pay back our student loans. $13k is nothing. What a farce.
What this means is my wifes sister will declare bankruptcy and wipe out her student loans (6 figures) after having hardly made a payment and deferring them for years and years, and going to school part time just to live off the student loan aid. She recently bought a corvette and was paying $700/month for that car while earning around $3,000/month, and lived in a beachside apartment. Meanwhile my wife and I live inland, drive 15 year old cars, and actually pay our student loans. BS.
Government backed student loans are a farce that has served no purpose other than to drive up the cost of education, enlarge and enrich university bureaucracies (while doing precious little for the faculty members who actually teach and do research) and leave the students with a huge tab. It's high time that we start unwinding these things so the price of higher education in this country will fall to reasonable and affordable levels.
While I agree, that is different than being able to use bankruptcy to shed them.
I think a reasonable solution in some of these cases would be to allow only the part of the loan that went to tuition to be discharged. Anything more than that provided at low rates (i.e., for living expenses), should not be discharged save for the most dire of circumstances approved by the courts.
The USA today article doesn't really describe what went on in this case. They did a radio story yesterday about it and it went into a lot more detail. The man PAID BACK THE LOANS. The judge worked out a payment plan and the man stuck to it and paid it back over 5 years. However it was either additional interest or fees that the judge ruled "discharged". It was an amount of $4000.00. So the man paid back the loan principle, but this additional $4000 was discharged. The man goes on with his life, gets married, and then - 11 years later - the company comes after him for the $4000. Possibly for the $4000 plus additional fees/interest.
So there are many issues at stake. Should the judge have discharged the original $4K without a hardship hearing? Once it was discharged, should the company be able to ignore the bankruptcy judgement and come out of the woodwork 10+ years later and go after this guy??
I've never had to file bankruptcy, and hope I never do. But - what would be the point if the creditors can ignore the finding and just wait -- then come after you 10 or 20 years later when you've rebuilt your finances?
Also the student loan company filed no objections in the original bankruptcy, no objections to his repayment plan or to the discharge of the $4k.
I think the bankruptcy judgement should stand. I think that it should be difficult to discharge student loan debt through bankruptcy, but it should be possible. And once it is done, it should stand as it is a legal finding.
The government should of NEVER backed any student loan.. it has led to nothing but TROUBLE for taxpayers... today colleges make almost ZERO effort to offer studies/degrees/curriculum for college students to get jobs... If you take away that government guarantee, lenders will make sure that the person they are lending to will have a job in the future and will demand colleges be ready to equip them with jobs... colleges NEED students and will be compelled by lenders to provide a usable degree to get a job in the market... with the government backing, lenders will loan any idiot some money because they can't discharge it on bankruptcy and has government insurance all over it.. the government has caused more harm to education than anything could possibly have done... its nice to provide students with an education but what good is an education without a job to go along with that education...
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